ELKHART, Ind., April 11 /PRNewswire-FirstCall/ -- Patrick Industries,
Inc. (Nasdaq: PATK) has agreed to acquire Adorn, LLC ("Adorn"), a
manufacturer and supplier of interior components to the recreational
vehicle ("RV") and manufactured housing ("MH") industries. Patrick expects
to close the acquisition within six to eight weeks and expects the
acquisition to be accretive to earnings in 2007.
Adorn, which is based in Elkhart, Indiana and recorded approximately
$240 million in revenue in 2006, manufactures and supplies laminated wall
paneling, cabinet doors and other interior components primarily to the RV
and MH industries. Adorn also manufactures and supplies a variety of
laminated products and slotwall for the industrial market. Adorn has three
facilities in Elkhart, as well as manufacturing facilities in eight other
states. Paul Hassler, President and CEO of Patrick Industries, said,
"Adorn's products provide a strong complement to our existing product
lines, while broadening our reach in the industrial sectors." With Patrick
Industries reporting 2006 revenue of $348 million, the combined entities
together account for approximately $588 million in total revenue. "This
acquisition will result in a nearly 70 percent increase in our top line,
and we intend to maximize synergies through an effective transition plan to
further drive profitability," Mr. Hassler said.
"Adorn provides an exceptional fit within the framework of our
strategic plan, which includes organic and acquisition growth to increase
shareholder value," said Mr. Hassler. "We and the Adorn management team are
excited to bring these two companies together and combine our efforts
toward industry 'best practices.'" The synergies of the combined companies
are expected to include logistics, personnel, product base, purchasing,
manufacturing efficiencies and increased capacity utilization, among
others. Mr. Hassler commented, "We feel this business combination will
result in Patrick Industries, Inc. becoming a premier manufacturer and
distributor of building and component products to the RV and MH
industries."
Todd Cleveland, President and CEO of Adorn, said, "I am truly excited
about the new opportunities the combination will provide for our valued
customers, team members, and suppliers. This combination will help to
ensure that these groups have a solid, efficient platform to work from,
with the ability to grow as future demand increases and the markets we
serve improve. Our combined team's immediate focus, upon the closing of
this transaction, will be to capitalize on the synergies that will drive
efficiencies and ultimately enhance shareholder value."
Adorn has been a portfolio company of Linsalata Capital Partners since
February 2000. Eric V. Bacon, Senior Managing Director at Linsalata, said,
"Combining forces with Patrick and its management team is a logical step
for these two companies and provides an excellent opportunity for Adorn and
its management team."
The acquisition will be funded through both debt and equity financing,
which will be structured to provide additional liquidity to facilitate the
combined companies' future growth plans and working capital needs. Patrick
has entered into a commitment letter with J.P. Morgan Securities Inc. and
JP Morgan Chase Bank, N.A. for a senior credit facility comprised of a
revolving credit loan and a term loan. Additional financing for the
acquisition will be provided by Tontine Capital Partners, L.P. and its
affiliates ("Tontine"). Tontine, a significant shareholder of Patrick, has
agreed to purchase 980,000 shares of Patrick common stock in a private
placement at a purchase price of $11.25 per share and to provide additional
interim debt financing in the form of senior subordinated notes.
Following the closing of the Adorn acquisition, Patrick intends to
raise up to approximately $20 million of additional equity capital by means
of a rights offering of common stock to its shareholders. The rights to be
distributed will permit Patrick shareholders as of the to-be-determined
record date to purchase additional shares of Patrick common stock at the
same $11.25 per share paid by Tontine in the private placement. Proceeds
from the rights offering are expected to be applied to repayment of debt,
including the senior subordinated notes.
The foregoing notice does not constitute an offer of any securities for
sale. The distribution of rights and the issuance of common stock related
thereto will be accomplished by means of a registration statement to be
filed by Patrick with the Securities and Exchange Commission. Patrick will
distribute the related prospectus following the effectiveness of the
registration statement to all shareholders as of the rights offering record
date.
About Patrick Industries
Patrick Industries, Inc. (http://www.patrickind.com) is a manufacturer of
component products and a distributor of building products serving the
recreational vehicle, manufactured housing, kitchen cabinet, home and
office furniture, fixture and commercial furnishings, marine, and other
industrial sectors and operates coast-to-coast through locations in 12
states. Patrick's major manufactured products include cabinet and wall
components, countertops, adhesives, and aluminum extrusions. Patrick also
distributes drywall and drywall finishing products, interior passage doors,
flooring, vinyl and cement siding, ceramic tile, high pressure laminates,
and other miscellaneous products.
About Adorn, LLC
Founded in 1986, Adorn, LLC (http://www.adornllc.com) manufactures and
supplies laminated wall paneling, cabinet doors and other interior
components to the recreational vehicle and manufactured housing industries.
Adorn also manufactures and supplies a variety of products including
laminated products and slotwall for industrial, furniture, kitchen cabinet
and store fixture applications. Adorn's nationwide facilities are
strategically located throughout the United States.
Forward-Looking Information
This press release contains certain "forward-looking statements" within
the meaning of the Private Securities Litigation Reform Act of 1995 with
respect to financial condition, results of operations, business strategies,
operating efficiencies or synergies, competitive position, growth
opportunities for existing products, plans and objectives of management,
markets for Patrick's common stock and other matters.
Statements in this press release that are not historical facts are
"forward-looking statements" for the purpose of the safe harbor provided by
Section 21E of the Exchange Act and Section 27A of the Securities Act.
Forward-looking statements, including, without limitation, those relating
to our future business prospects, revenues and income, wherever they occur
in this press release, are necessarily estimates reflecting the best
judgment of our senior management at the time such statements were made,
and involve a number of risks and uncertainties that could cause actual
results to differ materially from those suggested by forward-looking
statements. Patrick does not undertake to update forward-looking statements
to reflect circumstances or events that occur after the date the
forward-looking statements are made. You should consider forward-looking
statements, therefore, in light of various important factors, including
those set forth in this press release. There are a number of factors, many
of which are beyond Patrick's control, which could cause actual results and
events to differ materially from those described in the forward-looking
statements. These factors include pricing pressures due to competition,
costs and availability of raw materials, availability of retail and
wholesale financing for manufactured homes, availability and costs of
labor, inventory levels of retailers and manufacturers, levels of
repossessed manufactured homes, the financial condition of our customers,
interest rates, oil and gasoline prices, the outcome of litigation, volume
of orders related to hurricane damage and operating margins on such
business, and adverse weather conditions impacting retail sales. In
addition, national and regional economic conditions and consumer confidence
may affect the retail sale of recreational vehicles and manufactured homes.
SOURCE Patrick Industries, Inc.
 back to top
Related links:
http://www.patrickind.com
http://www.adornllc.com
CONTACT:
Ryan McGrath, rmcgrath@lambert-edwards.com,
or Jeff Lambert, both of Lambert, Edwards & Associates, Inc.,
+1-616-233-0500
|
